International Business Case

As a company expands, it begins to get itself involved in marketing programs that may not have been part of the original business plan. Businesses evolve, and plan change and a company may begin to realize that it needs to get involved in international markets. Obviously, it has a lot of benefits when a company enters into a foreign market. Expanding sales, acquiring resources and minimizing risk are the three principal operating objectives that why companies engage in international business. Normally, these three objectives guide all decisions about whether, where and how to engage to be international business. So in order to seek high sales and profits, gain global market share and reduce dependence on existing markets, it is inevitable for any companies to go abroad. However, it also generates enormous number of challenges and issues when organizations decide entry overseas markets. “The international Companies operate in an environment shaped by cultural, legal, economy, trade governmental and institutional forces.”(Daniels, 2010) So this article will use some examples to discuss the key challenges and issues faced by business organizations when they decide expand into overseas market, also compare the difference between the management of international business operations and management of nationally based operations.

First of all, take McDonald’s and KFC as the example. Both McDonald’s and KFC are the leading restaurant in the world, and in western countries McDonald’s preforming is far more superior than KFC, while, in Chinese market, McDonald’s cannot compete with KFC. Until 2012, KFC have over 3000 chains in China while McDonald’s only have around 1000 chains, and no matter the total revenue, the number of the chains and the speed of spread, KFC is far ahead McDonald’s. According to those two companies development background we could found several reasons about why McDonald’s relative failed in China. And those reasons are also the basic issues for any organizations should be considered.

As early as 1985, KFC has been interesting in Chinese market, so the KFC president taken decisive action, which choose a Chinese called Dongda Wang as vice-manager in Southeast Asia because he born in China, has clear knowledge about Chinese culture and consumer behavior. After he did over a year research, the first KFC restaurant opened in Beijing. The first operation KFC did in Chinese market is that the main products are based on Chicken instead of beef. Because KFC found Chinese people like eat chicken more than beef. Secondly, KFC supported the cleanest restaurant that Chinese customer had never seen because in the last century, the most unpleasant place in traditional China’s family was the kitchen and bathroom. So at that time KFC made a huge influence among Chinese people, and a significant number of Chinese people want to tasted this western restaurant, even though at that time the hamburger was sold 1 pound